On 17 November the Chancellor presented his Autumn Statement. Jeremy Hunt announced that the recent changes to stamp duty law tax (SDLT) thresholds for first time buyers would now only be temporary, and would remain in place until 31 March 2025.

The changes were first introduced with immediate effect as part of the ‘mini-budget’ delivered on the 23 September 2022 and survived the subsequent government U-turn on the 17th October 2022.

SDLT is charged on the purchase of property or land. It applies in England and Northern Ireland only. In Scotland and Wales there are separate property transaction taxes. (Land and Buildings Transaction Tax in Scotland and Land Transaction Tax in Wales).

The amount paid depends largely on the type of property sold (residential or commercial), the selling price and the circumstances of the purchaser. There are also a number of reliefs that may be claimed reducing the amount of tax paid on the transaction.

First-time buyers of residential property may claim tax relief if the purchase price is no more than £625,000. If someone is eligible they are charged tax at 0% on the first £425,000, and 5% on the remainder.

WHAT CHANGES TO SDLT WERE ANNOUNCED FOR FIRST TIME BUYERS?

On 23 September the Chancellor announced three changes to SDLT:

an increase in the threshold up to which SDLT is not paid – the ‘nil-rate threshold’ – from £125,000 to £250,000.
an increase in the nil-rate threshold for first-time buyers relief, from £300,000 to £425,000
an increase in the maximum amount first-time buyers can buy a house for and still be eligible for relief, from £500,000 to £625,000.

Section below reproduced from Stamp Duty Land Tax (Reduction) Bill 2022-23 Research Briefing from the House of Commons Library.

Table 1 shows SDLT rates and bands for residential property prior to the Chancellor’s announcement on 23 September 2022 and after.

The examples below show how this works in practice, with the amount of SDLT that would have been paid under the rates before 23 September, and after.